Coalition ministers and the Department of Human Services have insisted automated letters are not "debt letters", and that welfare recipients have ample opportunity to update their records.

But Centrelink clients have told the ABC private debt collectors were contacting them about thousands of outstanding dollars, despite still contesting the debt.

In some cases, welfare recipients were being told to provide Centrelink with pay slips dating back to 2012.

Mr Tudge rejected reports clients trying to update their details had struggled to contact Centrelink on the phone, instead asking people to be patient if they were required to wait "longer than what they would like to wait".

Labor's human services spokeswoman Linda Burney said Mr Tudge had contradicted Social Services Minister Christian Porter, by claiming the program had recovered $300,000 million since July, rather than identifying it.

"This has serious implications for the Government's continued defence of its embattled robo-debt system," he said.

A 'blunt instrument' being used to save money

Australian Council of Social Services chief executive Peter Davidson called on the Government to suspend the automated program until it could be independently reviewed.